27 June 2018 | Herpreet Kaur Grewal
The period from now to 2040 will bring "profound and far-reaching changes to corporate real estate portfolios", according to real estate adviser CBRE.
The new report Portfolio 2040, examines how business, buildings and perhaps even cities themselves, might look in 20 years' time.
The report argues that one of the drivers for change is "pervasive availability, and creative use of very high-volume data and the growth of AI, enabling companies to adapt almost instantaneously to external change and offer increasingly personalised solutions".
Rapid and fluid specialisation, either temporary or permanent, will characterise most businesses and real estate will need to reflect this by being increasingly flexible, multipurpose and rapidly adaptable.
Amanda Clack, head of strategic consulting at CBRE, said: "Today's rigid business processes will become completely fluid, with companies adapting instantly to changes in external market conditions and consumer behaviour. This is mostly enabled by the widespread use of AI on a foundation of more and better data. This leads to a more frictionless business environment, but also drastically disrupts how businesses operate."
The report states that portfolios will no longer be viewed as a collection of fixed assets, but a diverse range of adaptable capacity which can be shaped and repurposed in response to consumer demand. Spare or "just-in-case" capacity will be eliminated.
Clack added: "The age of ownership is over, with companies adopting an asset-light approach and outsourcing all non-core business activities. Core assets will remain, often manifesting as 'trophy' workplaces, luxury spaces, but these will be smaller and on longer-term leases. Everything else will be shared, partnered and outsourced."
The report also argues that the workforce as it exists now will also likely no longer be the same, with the next 20 years bringing "radical changes in demographics, labour procurement and organisational culture". It claims that companies will buy talent on-demand globally, as required and many job descriptions won't even reference a location.